Market Profile - Daily updates

[CJS]

09/21/15 Morning update. Good morning. Hope everyone's weekend was well. Overnight trade is in balance, and I'm seeing inventory as pretty balanced too. Once again, balance rules apply. (see 9/16 Morning Update for rules if needed).
I was up a little earlier today and notice a rip in the ES right after 4am PST - checking the news, Fed's James Bullard spoke and I guess his comments caused the mkt reaction. We'll see if this continues.
Just be weary of the fact that the mkt has been very weak lately with no confidence in either direction that lasts.

O/N high 1964.25
O/N low 1938.5
Prior pit high 1967.5
Prior pit low 1941.25
Settle 1951.25
O/N volume 217K at 0550am PST.
Have a good day!

 

[CJS]

09/21/15 Recap and prep (for 09/22). Value today migrated from early am overlapping to higher, to balanced, inside of Friday's value area. This morning's attempt to auction outside of balance was a failed attempt. We had a bit of buyers and sellers controlling the mkt at times. I believe this indecision was influenced by the fed speakers today.
We are forming a tight 2 day balance now. I thought we would have more follow through in one direction or the other. So I am left with a neutral bias going into tomorrow. Something to carry keep in your mind is that we are 1 T.F. higher on a weekly basis. This will continue (at least this week) until the low of last week is taken out (1936.5).
****** Conflicting Info******
Positive:
1) 1 T.F. higher on a weekly basis
2) Weekly excess low on the week ending 8/28

Negative:
1) Prices currently being accepted below my personal go no/go price level of 1981
2) 18 day balance on a daily basis (upper extreme: 1981/ lower extreme: 1889.5); balance is low confidence in a mkt.
3) Longer term trend is tired.
4) Weekly excess high on the week ending 9/18

 

[CJS]

09/22/15 Morning Update. All auctions remain to the downside. The confirmed excess high on last weeks bar adds strength to the current direction. Currently trading a 16 handle gap to the downside. Gap rules apply. (reference 9/18 post for gap trading rules).
The closest downside target that I can see is the weekly low from the week ending 9/11. It's suspect because the low was made on Labor Day's shortened session. I don't know if that matters much or not. Just mentioning it. Below that, we have a poor low from 9/4 at 1907.75. Beyond that is the lower extreme of the 18 day balance area at 1889.50.

O/N high 1965
O/N low 1925.75
Prior pit high 1969
Prior pit low 1944.25
Settle 1963.5
Volume 365K (moderate) as of 0600am PST

 

[CJS]

09/22/15 Recap and prep (for 9/23). Attempted direction down, higher volume, lower value implies a very weak market. We're all aware of the current conditions being weak. I believe the game today for traders was to get the stops below the weekly low from the week ending 9/11.
They took out the low but I didnt see any stops elected. The profile leading up to this attempt was shaping up to be a 'b' pattern and also the low today left a poor low. Being so close to another low (the weekly), it is also a weak low (weak references are those that come within a tick of another. Even though we have two ticks between the two lows, the fact that 1 was a weekly ref Im considering it weak).
This is all evidence of day timeframe traders as longer term money isn't aware of these references. This and the fact that had there been longer term money the stops would've been taken out with little resistance. The 'b' patterns and poor lows combined is a classic market profile pattern providing evidence of day timeframe traders getting themselves too short. We now have 2 poor lows to contend with. Today and 9/4.

1 T.F. has ceased on the weekly timeframe. On the daily timeframe we continue to build value lower. Two down gaps have held. The destination still remains the lower extreme of the 19 day balance bracket 1889.50.

With value clearly being accepted with price lower, gap downs, and now two poor lows, I believe that the mkt sentiment is to clean up these poor lows, at the very least.
But with how low confidence is, any good news coming out of another country could spark a forced rally. Keep alert!

 

[CJS]

09/23/15 Morning Update. Good morning. Large range overnight: 31 handles. O/N inventory I see as balanced due to downside trade took place all in one period. The rest of the session has been bid. As of this post we are 2 ticks above prior pit high. We may have some trapped shorts from yesterday (due to the profile shape and poor/weak low). Should we begin trading to the upside at open, they may be squeezed even further. Also, there is a gap that remains to be filled. If the mkt can find acceptance above O/N high, I'm sure traders will try and close the gap.
Carry fwd the 1T.F. lower on a daily basis and that we have ceased 1T.F. higher on a weekly basis.
The conflicting info to be mindful of today is the open gap (cause to close it - upside trade), the two poor lows we have now and yesterdays prominent TPO POC (cause to be repaired by day time session trade - downside trade)

O/N high 1941.75
O/N low 1910.50
Prior pit high 1936.75
Prior pit low 1917.75
Settle 1931.5
Volume 325K as of 0545am PST

 

[CJS]

09/23/15 Morning Update. Good morning. Large range overnight: 31 handles. O/N inventory I see as balanced due to downside trade took place all in one period. The rest of the session has been bid. As of this post we are 2 ticks above prior pit high. We may have some trapped shorts from yesterday (due to the profile shape and poor/weak low). Should we begin trading to the upside at open, they may be squeezed even further. Also, there is a gap that remains to be filled. If the mkt can find acceptance above O/N high, I'm sure traders will try and close the gap.
Carry fwd the 1T.F. lower on a daily basis and that we have ceased 1T.F. higher on a weekly basis.
The conflicting info to be mindful of today is the open gap (cause to close it - upside trade), the two poor lows we have now and yesterdays prominent TPO POC (cause to be repaired by day time session trade - downside trade)

O/N high 1941.75
O/N low 1910.50
Prior pit high 1936.75
Prior pit low 1917.75
Settle 1931.5
Volume 325K as of 0545am PST

We are opening in Balance. Balance rules for today peeps.

 

[CJS]

09/23/15 Recap and prep (for 9/24). The best trade of the day in my mind was the look above (balance) and fail in 'C' period. I was short with perfect trade location and minimal risk -- all to scratch it. These asymmetric opportunities are some of the most scariest because you're fading the most recent mkt direction. I scratched thinking they were going to close the gap. Oh well, another will come.
The rest of the day remained within yesterday's range. We have a 2 day balance. Value was overlapping to higher today, and technically we have one day of 1 T.F. higher since the low of yesterday wasn't touched. But with value and the POC's in the center of today's range, I'm not putting much weight on the 1 T.F. higher. This mkt has very low confidence.
One thing I want to point out, is the balance trading rule that states, a look above and fail targets the opposite extreme. Traders pushed for that today but couldn't get it past yesterday's POC's (both the TPO and Volume). I've posted a coupld of times how the mkt tends to revisit these naked POC's and are excellent areas to exit a trade with ease. So, once sellers couldn't get anything more for their efforts over periods 'F' and 'G', buyers stepped in an drove the mkt up considerably. All a game.

 

[CJS]

09/24/15 Morning Update. Good morning. Trading out of balance 8-10 handles to the downside overnight. Gap rules apply.
1. Go with all gaps that don’t fill right away.
2. Large gaps may not fill or may fill only partially on the first day. Pay attention to “halfback” of the gap distance.
3. If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally in the direction of the gap.

We are currently below the weekly (ending 9/11) low at 1918.25. This low is two ticks above the poor/weak low - Market Profile anomalies only get repaired during day time trading hours.
Traders could be targeting the lower extreme of the 19 day balance bracket at 1898.50. This is also a poor low.
Remember we have a secure and excess high from the week ending 9/18, supporting the continued intermediate term auction to the downside.
Have a good day.

O/N high 1936.25
O/N low 1907.50
Prior pit high 1938.75
Prior pit low 1920.75
Settle 1929.25
Volume 337K as of 0550am PST

 

[CJS]

09/24/15 Recap and prep (for 9/25). Substantial volume today, 1.9M contracts. Another day of text book examples to discuss about Market Profile concepts.

1) We have 2 handles of excess on the lows, solid evidence of the downside auction at the time being completed. Another term used is the low presented a very nice 'buying tail' with only 81 contracts on the low print.
2) The mkt cleaned up the poor low from 9/4 at the lows too. Once this event was over:
3) The mkt came back to clean up the poor low from 9/22.
4) The mkt closed the gap from today as well, and traders were able to hold price above the Weekly low of 1918.25.

All of the above has me holding somewhat of a short term bullish bias. Excess and balance are the two most important concepts. Today's low presented good excess. However, I'm keeping in mind that there is a definite downtrend on a daily basis (and we are 1T.F. lower, and value is migrating lower). But I take what I saw today as the mkt taking care of the old business at hand, and has good reason (nothing minus a few anomalies to repair on the downside) to continue auctioning to the upside. Anomalies: there are a few from today's profile. But, should be market trade to the upside tomorrow, these anomalies are not an issue. If the market trades to the downside, then they come into focus.

Lastly, as I look at the volume and the excess low, I will be ready tomorrow if the mkt trades to the upside as these two items combined being a combo of exhaustion selling and long accumulation from longer term players.

 

[CJS]

09/25/15 Morning update. Good morning. 18 handle gap to the upside. Gap rules apply:
1. Go with all gaps that don’t fill right away. That means if it doesn’t back off early it’s probably not going to and is going higher.
2. Large gaps (this is one) may not fill or may fill only partially on the first day. Pay attention to “halfback” of the gap distance.
3. If the gap fills and value cannot get to at least overlapping, there will probably be a late day rally.
O/N inventory is 100% long.

O/N high 1951
O/N low 1912.75
Prior pit high 1926.75
Prior pit low 1897.25
Settle 1919.50
Volume 378K as of 0550am PST